With the Treasurer positioning productivity and tax reform at the heart of the Federal Budget 2026–27, The Tax Institute is calling for urgent action on several announced but unenacted measures that continue to create uncertainty and increase compliance costs for taxpayers and practitioners.
Some of these measures were announced during the last term of Parliament, and others were announced many years ago. In some cases, there is little more than a media release; in others, the Government has released a consultation or discussion paper. But in all cases, no new law has been enacted, even though some measures have announced start dates that have already passed. The Tax Institute urges the Government to confirm whether these measures will progress or be abandoned, so taxpayers and practitioners can plan with confidence and certainty.
The Tax Institute’s Head of Tax and Legal, Julie Abdalla, FTI, says: “There is a pattern of inaction, of promising taxpayers change and not following through. Time and time again, we’ve seen tax measures promised in Federal Budget announcements that are then ignored for years. Until the government resolves the long list of outstanding
measures and establishes a process for ongoing system maintenance, we will not see real progress on the productivity agenda or efforts to cut red tape.”
“If the government does not intend to proceed with certain announced measures, they need to come out and say so explicitly.”
“We would like to hear genuine tax reform announced in the upcoming Budget. But more than that, taxpayers need to know that what’s announced will actually be delivered in an effective and timely manner.”
Among many important unresolved matters, some of the key announced, but unenacted measures are:
Large Business and International
Corporate tax residency reforms, announced in the Federal Budget 2020-21 following recommendations from the Board of Taxation, remain unlegislated despite strong industry support. In making its recommendations, the Board of Taxation found that the existing rules are ‘out of step with modern business practices, create considerable uncertainty, are susceptible to manipulation and increase the potential for international disputes’. As a consequence, many corporations are experiencing a significant increase in financial costs and disruptions to business.
The Government’s proposal to strengthen the foreign resident capital gains tax regime, announced in the Federal Budget 2024–25, has also stalled. Although the Treasury released a consultation paper in July 2024, no progress has been made since then. The measure would broaden the range of assets subject to CGT. In an environment of already heightened investor nervousness, the uncertainty of whether or when this measure will proceed is a further constraint on investment.
Proposed updates to Part IVA, announced in the Federal Budget 2023–24 and later deferred in the Federal Budget 2024–25, remain unlegislated. These changes would expand the general anti‑avoidance rules to apply to certain cross-border transactions. Again, the uncertainty of which transactions this measure might apply to, and when, is an impediment to investment.
Similarly, the Government’s announcement in May 2024, as part of the Federal Budget 2024–25, of a new penalty regime for mischaracterised or undervalued royalties for large multinationals has not progressed. This is proposed to apply from 1 July 2026.
Further, in the Mid-Year Economic and Fiscal Outlook 2024–25, the Government expanded the penalty framework by announcing a measure that proposes to penalise large taxpayers that mischaracterise or undervalue interest or dividend payments to which withholding tax would otherwise apply. This measure is also supposed to commence on 1 July 2026.
Finally, on 13 March 2025, the Government announced proposed amendments to the Managed Investment Trust (MIT) regime to clarify that trusts ultimately owned by a single widely held institutional investor (such as a foreign pension fund) can continue to qualify for MIT withholding tax concessions, following the ATO’s release of Taxpayer Alert TA 2025/1. The measure is proposed to apply to fund payments from 13 March 2025, but has not yet been enacted.
Fringe Benefits Tax
The Government has not confirmed whether it will proceed with consultation on FBT car parking benefits, originally announced in March 2022 following the Full Federal Court’s decision in Commissioner of Taxation v Qantas Airways Limited [2014] FCAFC 168. Employers remain uncertain about their obligations. This uncertainty has been compounded by the Federal Court decision in Toowoomba Regional Council v Commissioner of Taxation [2025] FCA 161, in which the Court held that a shopping-centre car park was not a ‘commercial parking station’ for FBT purposes because it was not operated commercially for profit. The Commissioner has appealed this decision. As a result, ongoing ambiguity remains for employers seeking certainty in the treatment of car parking fringe benefits.
Small businesses
The Division 7A deemed dividend rules remain one of the most complex and confusing areas of tax law. Yet targeted amendments announced in the Federal Budget 2016-17 and consulted on in 2018 remain unresolved.
The former government originally announced on 3 May 2016, as part of the Federal Budget
2016–17, that it would make legislative reforms to improve the integrity and operation of Division 7A following a consultation process conducted by the Treasury. Since then, the proposed reforms to Division 7A have been deferred multiple times, resulting in ongoing uncertainty and continued high compliance costs for taxpayers.
The reforms to Division 7A proposed in the Consultation Paper released on 22 October 2018 are based on recommendations by the Board of Taxation and include the following:
● simplified Division 7A loan rules to make it easier for taxpayers to comply with the provisions;
● a self-correction mechanism to assist taxpayers to promptly rectify breaches of Division 7A without having to apply for the Commissioner’s discretion;
● safe harbour rules relating to the use of assets that would provide certainty and simplify compliance for taxpayers;
● technical amendments to improve the integrity and operation of Division 7A while providing increased certainty for taxpayers; and
● clarification that the unpaid present entitlements of corporate beneficiaries of a trust fall within the scope of Division 7A.
Individuals
Reforms to individual tax residency, announced in the Federal Budget 2021–22, have not progressed despite a 2023 consultation paper. The outdated rules continue to create uncertainty for globally mobile individuals.
The Government’s proposal in the Federal Budget 2020–21 to allow deductions for education and training expenses unrelated to current employment has also stalled since the Treasury’s 2020 consultation.
A $1,000 instant tax deduction for work‑related expenses, announced during the 2025 Federal election campaign, has not advanced beyond its initial announcement, though it is expected that this measure is likely to be reannounced in the upcoming Budget.
Superannuation
Proposed changes to relax residency requirements for SMSFs, announced in the Federal Budget 2021–22 and deferred in the Federal Budget 2022–23, remain unimplemented. The reforms would allow trustees to temporarily relocate overseas for up to five years and remove the active member test.
Tax Administration
The proposal in the March Federal Budget 2022–23 to enable monthly or quarterly electronic lodgement of Taxable Payments Reporting System data has not progressed, despite its potential to streamline compliance.
Similarly, funding announced in the March Federal Budget 2022–23 to support data sharing of Single Touch Payroll information between the ATO and State and Territory Revenue Offices has not advanced.
Awaiting government response on Board of Taxation’s final reports
The Board of Taxation has undertaken several Reviews to which the Government has not yet responded. The Tax Institute is of the view that the Government should respond to and commence detailed and meaningful consultation on the implementation of key recommendations contained in these Reviews, without further delay. The outstanding Reviews include:
● Review of capital gains tax (CGT) rollovers
● Report introducing an asset merger rollover relief
● Review of the income tax treatment of certain forms of deferred consideration ● Fringe Benefits Tax Compliance Cost Review
These Reviews each involve a significant investment of time, expertise and effort by the Board of Taxation and the many stakeholders who contribute through submissions and technical consultation. They are essential for identifying issues in the tax system and opportunities for improvement. Leaving these Reports without response or action undermines that collective work and delays reforms that would benefit taxpayers and the broader economy.
Call to action
The Tax Institute calls on the Government to clearly state which announced but unenacted measures will proceed, and which will not, so taxpayers and their advisers can operate with the certainty they need.
“We’ve identified fourteen significant tax measures that have been stuck in limbo for years, creating ongoing uncertainty and complexity for taxpayers, and the list goes on. Worse still, that’s not including the various reviews undertaken by the Board of Taxation and as yet left unanswered by the government. That’s not good enough, and the government needs to be
held to account on these matters.”
Snapshot of selected announced but unenacted measures
| Measure | Announced Latest update Current status |
| Corporate tax residency reforms | Federal Budget No changes Unresolved 2020-21 (October 2020) |
| Proposal to strengthen the foreign resident capital gains tax regime | Federal Budget Deferred in Unresolved 2024-25 Federal Budget 2025-26 |
| Proposed updates to Part IVA | Federal Budget Deferred in Unresolved 2023-24 Federal Budget 2024-25 |
Penalty regime for mischaracterised or undervalued royalties
Federal Budget 2024-25
No changes Unresolved, but proposed to
| for large multinationals | apply from 1 July 2026 |
| Penalties for large taxpayers that mischaracterise or undervalued interest or dividend payments to which withholding tax would otherwise apply | MYEFO 2024-25 No changes Unresolved, but proposed to apply from 1 July 2026 |
| Proposed amendments to the Managed Investment Trust (MIT) regime | March 2025 No changes Unresolved, but proposed to apply from 13 March 2025 |
| Consultation on FBT car parking benefits | March 2022 No changes Unresolved |
| Division 7A deemed dividend rule amendments | Federal Budget Consulted Unresolved 2016-17 paper released in 2018 |
| Reforms to individual tax residency | Federal Budget Consultation Unresolved 2021-22 paper released in 2023 |
| Proposal to allow deductions for education and training expenses unrelated to current employment | Federal Budget Consultation Unresolved 2020-21 paper released in 2020 |
| A $1,000 instant tax deduction for work‑related expenses | 2025 election No changes Unresolved campaign |
| Proposed changes to relax residency requirements for SMSFs | Federal Budget Deferred in Unresolved 2020-21 Federal Budget 2022-23 |
| Proposal to enable monthly or quarterly electronic lodgement of Taxable Payments Reporting | March Federal No changes Unresolved Budget 2022–23 |
| System data | |
| Funding to support data sharing of Single Touch Payroll information between the ATO and State and Territory Revenue Offices | March Federal No changes Unresolved Budget 2022–23 |